WASHINGTON — A second day of market devastation shook Washington on Friday, vanishing more than $5 trillion in value in one of the largest 48-hour losses on record — an extraordinary rout caused not by pandemic, war, terrorism or bank failure, but by policy set by the American president.

The policy, announced by President Donald Trump on Wednesday, would levy steep tariffs on nearly every nation in the world in the coming days, starting with a base tariff rate of 10% but climbing higher for some of the largest U.S. trading partners, including China, South Korea, Japan and the European Union.

The market drop has prompted a small but influential group of Republican senators to partner with Democrats in a nascent effort to wrest back control over tariff policy from Trump.

The Standard and Poor’s 500, NASDAQ and the Dow Composite all reeled over the news from the morning bell to close. The Dow dropped 2,231.07 points, or 5.5%, in its largest drop since the pandemic started, following a 1,679-point drop the day prior. The S&P 500 fell 5.97% to 5,074.08, and the NASDAQ dropped 5.8%, to 15,587.79, entering bear market territory.

Before the markets opened Friday, China announced it would reciprocate with a 34% tariff on imported U.S. goods. And as markets spiraled, the Federal Reserve chair, Jerome Powell, warned of “persistent” negative effects from the new trade policy.

“We face a highly uncertain outlook with elevated risks of both higher unemployment and higher inflation,” Powell said Friday. “Tariffs are highly likely to generate at least a temporary rise in inflation.”

Reacting to the markets, Treasury Secretary Scott Bessent told Tucker Carlson in an interview Friday that “Wall Street’s done great. It can continue doing well.” But, he added, “it’s Main Street’s turn.”

“This is transformational for the American economy, for the American worker and for the new Republican alignment,” Bessent said. “I think this is the beginning of a process. We are going to reindustrialize. We have gone to a highly financialized economy — we have stopped making things, especially a lot of things that are relevant for national security.”

J.P. Morgan increased its assessment of the risk of recession this year to 60%, up from a 40% chance it had published just days prior. And the World Trade Organization warned of deep trouble to come if Trump refuses to change course.

“While the situation is rapidly evolving, our initial estimates suggest that these measures, coupled with those introduced since the beginning of the year, could lead to an overall contraction of around 1% in global merchandise trade volumes this year, representing a downward revision of nearly four percentage points from previous projections,” said Ngozi Okonjo-Iweala, director-general of the WTO. “I’m deeply concerned about this decline.”

Asked about the chances of a U.S. and global recession hitting this year, Senate Minority Leader Chuck Schumer, a Democrat from New York, said, “I’m very worried about it.”

“This is one of the most disastrous and poorly thought out policies that the Trump administration has done thus far, and that’s saying a lot,” he added.

Responding to the crisis, Sen. Charles E. Grassley, R-Iowa, partnered with Democratic Sen. Maria Cantwell from Washington state to introduce a bill that would require the president to submit new tariff policies to Congress for notification, review and approval.

“I’ve long expressed my view that Congress has delegated too much authority on trade to the executive branch under Republican & Democrat presidents,” Grassley wrote on X.

The bipartisan bill already has three additional Republican sponsors — Sen. Jerry Moran of Kansas, Sen. Lisa Murkowski of Alaska and Sen. Mitch McConnell of Kentucky. Other Republicans, including Trump supporter Sen. Thom Tillis of North Carolina, are expressing interest in the bill.

The Grassley-Cantwell bill marks the second time senators pushed back on Trump’s new import taxes in just a week. On Wednesday, in a rare rebuke of the president, the Senate passed a resolution designed to thwart the imposition of tariffs on Canada.

Four Republicans — including Murkowski and McConnell — joined all Democrats in passing the resolution on a 51-48 vote.

Democratic leadership in the House of Representatives hopes the Grassley-Cantwell bill might have a path to passage in their chamber eventually, but one senior congressional aide said that leadership is doubtful anything will move in the short term.

“I don’t see it yet,” the aide said, granted anonymity to discuss internal deliberations, “but down the road, it’s possible.”

The White House said that its base tariff rate of 10% would go into effect at midnight Eastern time Saturday, and that its country-specific duties would go into force Wednesday.

Trump, meanwhile, told investors on social media Friday, “MY POLICIES WILL NEVER CHANGE.”

But in a separate post, the president said he had discussed a deal with leadership in Vietnam — one of the nations hardest hit, with a 46% tariff rate — in a sign he is willing to negotiate over the policy.

Trump stated that Vietnam would be willing to cut its tariffs “down to ZERO” to strike an agreement with the United States. But Vietnam’s tariffs on the few U.S. goods it purchases are already low. Instead, the high rate imposed by the Trump administration on Vietnam actually targets the U.S. trade deficit with Vietnam — a capitalist result of U.S. consumers wanting to purchase more Vietnamese goods than the other way around.

As with other countries, such as Israel and Switzerland, which have no import duties on U.S. goods, it is unclear what will be required from each country for Trump to lower or eliminate rates. A consistent measure for success has not been articulated by the administration. To the contrary, senior aides to Trump have repeatedly referred to the 10% baseline tariff rate as a new normal.

Cambodia, hit with a 49% import tax, also asked Trump on Friday to postpone implementation of the new rate.

The president is in Florida golfing at his resort for the weekend.

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